OTTAWA - Canada’s job market bounced back in November after a sluggish October, the economy creating the most jobs in eight months, according to data that offered hope of stronger economic growth in the fourth quarter.
The economy added 59,300 net new jobs in the month, mostly full-time positions and in the private sector, Statistics Canada said on Friday in its Labour Force Survey.
The jobless rate fell to 7.2 percent, the lowest level since March, from 7.4 percent.
Market operators surveyed by Reuters had forecast, on average, 10,000 new jobs in November and a steady 7.4 percent jobless rate amid signs the economy was struggling to gain momentum.
“Just as the conventional wisdom pretty much everywhere was that the Canadian economy was practically grinding to a halt, we get handed one of the strongest job numbers of the year,” said Doug Porter, deputy chief economist at BMO Capital Markets.
“It’s a solid report, from head to toe. At least upon first glance, I don’t see any major warts in the data,” he added.
The Canadian dollar jumped to a one-month high after the data $0.9878 versus its U.S. counterpart, or $1.0124 , compared with $0.9925, or $1.0076, immediately before the releases. It was Canadian dollar’s strongest level since Nov. 7.
The average monthly employment gains were 20,700 over the past six months, a time frame that reflects a more realistic trend as monthly figures tend to be erratic.
Canada’s economy grew at a tepid 0.6 percent pace, annualized, in the third quarter. While the fourth quarter is likely to show some momentum, growth may not be strong enough to force the Bank of Canada to raise interest rates.
The central bank has held its key rate at 1 percent for over two years but has been signaling plans to hike rates since April, the only central bank in the Group of Seven wealthy nations to have that hawkish tilt.
Overnight index swaps, which trade based on expectations for the central bank’s key policy rate, showed that traders resumed placing small bets on a rate hike in late 2013 after the employment reports.
But economists say the bank is in data-watching mode before deciding when to make a move.
“Right now I think the bank has mostly just focused on the external events. They’ll need to see what happens with the U.S. fiscal situation before they want to provide any updated views,” said Mazen Issa, strategist at TD Securities.
The November hiring was concentrated in the services sector, which created 65,700 new positions and was led by accommodation and food services, retail and wholesale trade, and professional, scientific and technical services.
The goods-producing sector lost 6,200 jobs, with the number of workers in manufacturing declining by 19,600.
Year-over-year wage growth fell sharply to 2.2 percent in November from 3.9 percent in October, based on the average hourly wage of permanent employees.
The economy created only 1,800 jobs in October and a hefty 52,100 in September, although secondary data for that month showed a decline in non-farm payrolls.